Social Security is main income for many older Californians

For the nation's 45 million elderly Social Security recipients, the bad news tempered the good: They learned this week that a 2013 cost-of-living increase will raise their monthly Social Security income – but by only a fraction.

For the nation's 45 million elderly Social Security recipients, the bad news tempered the good: They learned this week that a 2013 cost-of-living increase will raise their monthly Social Security income – but by only a fraction.

The 1.7 percent adjustment, which comes to an average of less than $24 per recipient per month, is the smallest increase in decades.

That amount "obviously says that Social Security is not likely to keep up with the costs facing our world," said Christopher Hoene, executive director of the California Budget Project, which advocates for low-income Californians. "We haven't been in a period of inflation, but it's hard to believe such a small increase will keep up."

For many of today's elderly, advanced age already brings a delicate and difficult numbers dance.

Some – like 89-year-old Marcia Howard and her friend, Dolores Scott, 80, who live across the hall from one another at the Eskaton Roseville Manor subsidized housing community for seniors – are living close to the financial edge.

"I worry about making ends meet," said Howard, a widow. "I can't go out and buy new clothes. I buy my pants for $7 at Wal-Mart. I have to watch what I spend. I can't do like I used to. If we go to lunch, it's Taco Bell.

"I never thought about having to pinch pennies at this age."

The two women represent a significant segment of the aging population: older adults scrimping by month to month, counting on Social Security as their safety net.

One in five elderly Californians, and 46 percent of those who are single or widowed, rely on Social Security for 90 percent or more of their income, according to Social Security Administration data. Even when bolstered by pensions and savings plans, Social Security makes up at least half of the income for 52 percent of older Californians.

And experts know that the enormous generational wave of baby boomer retirees will rely on Social Security even more: One-third of them have no retirement savings at all, according to a Wells Fargo retirement study.

"For baby boomers, pensions are much less common now than they were," said Cheryl Matheis, AARP senior vice president. "Many baby boomers don't have a separate retirement plan at all. What they have is Social Security."

Without reform to address long-term solvency issues, the Social Security trust fund can pay full benefits to recipients – essentially a set calculation based on one's earnings – for another two decades, then 75 percent of its obligations after that, the Congressional Budget Office estimates.

"It's a common thing for people to say that they don't expect Social Security to be there for younger generations," said Matheis, "but that's based on no understanding. Congress will not let this program go. It's very well-respected.

"When people say, 'I'm not counting on it,' I think, 'Well, what are you counting on instead?' "

Candidates differ

While policy experts and politicians on both sides of the aisle agree that reform is crucial to preserve the future of Social Security, it's largely been lumped in this election season with concerns over Medicare solvency, an even more pressing need.

Even so, there are critical differences between the presidential candidates.

Republican challenger Mitt Romney advocates a slow increase in the Social Security retirement age – now 67 for people born in 1960 or afterward – as well as slower increases in future benefits for higher-income recipients.

President Barack Obama opposes attempts to privatize Social Security as well as any reduction of future benefits but calls for people with annual incomes of $250,000 or more to contribute at a higher rate to shore up the trust fund.

Most of the time, Social Security benefits don't exactly amount to a windfall. The average Social Security payment for California's 3.7 million senior recipients is $13,800 annually, or $1,150 a month, barely above the federal poverty line.

Despite that, AARP data show that 9 percent of elderly Californians fall below poverty level, with incomes less than $10,890 a year. Without Social Security, another 28 percent of older Californians would fall below the line.

Those living just a breath away from poverty on Social Security are overwhelmingly female: Elderly women typically earned lower salaries and took more time out of the workforce, if they worked at all, and now they've outlived their husbands.

Dolores Scott spent years raising her children while her late husband, Francis, worked as a paving contractor. When he was injured on the job, she went to work as a cook at a convalescent home.

The couple never had much, and Scott's Social Security check reflects that. She receives $729 a month, so little that she also qualifies for a Supplemental Security Income payment and Medi-Cal.

Because she lost her eyesight to macular degeneration, she moved two years ago from subsidized senior housing in Grass Valley to Eskaton Roseville Manor, not far from her daughter in Citrus Heights.

"I feel so lucky," said Scott. "It's cozy and comfortable here. I don't have a lot, but I have everything I need."

'Great coping skills'

Elderly people scraping by as best as they can on small, fixed Social Security benefits usually don't complain about their circumstances, said gerontologist Rosanne Bernardy.

Still, when Social Security checks arrive at the beginning of each month, attendance temporarily drops at the senior center. People are too busy paying bills and stocking up on groceries to attend their usual exercise classes and bridge games.

Many of the center's seniors who make do on Social Security and little else have asked for help applying for food stamps, and many struggle with rising rents.

"Maybe when they first received benefits, they didn't have the medications they do now," said Bernardy. "Life changes in a way that's more expensive, especially if the spouse dies. We see widows in really tough circumstances.

"What's sad is that they're literally never able to buy anything new. I hear people talking about how they want to give birthday gifts to their grandchildren. And it's just not in the cards for them."

Marcia Howard's first marriage ended a decade after World War II. But her later marriage to Charlie Howard, whom she'd known since their high school days in Paso Robles, ended only with his death 17 years ago at age 73.

She raised her daughter and worked off and on through the years in a variety of clerical positions. Her husband worked as a chef.

"I thank God I have his Social Security," she said. "My own Social Security payment would be half that amount."

The $917 Social Security check she receives each month provides her only income. Out of that, she pays the rent for her apartment as well as her Medicare fee, utility bills and food costs. Factor in gas and insurance for her 1991 Toyota, and there's rarely much cushion at the end of the month.

She regularly attends a Bible study with her daughter, and she likes to go to lunch with a group of friends who have met twice a month since 1980. It's a quiet life, a comfortable life, but she worries about making ends meet.

Not long ago, she signed up for the federal Lifeline program for low-income seniors to reduce her monthly phone payment.

"Before that, I was getting down to having hardly anything," she said. "When I got paid, it all went right back out."